The MVRV index of short-term Bitcoin whales indicates that the cryptocurrency market still has room for price increases.
The MVRV index measuring the unrealized profits of short-term Bitcoin holders is currently at 1.15, below 1.35 – a threshold that typically leads to profit-taking and price corrections. This signals that the market can still continue to develop positively.
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The MVRV index of short-term Bitcoin holders is currently low, indicating low unrealized profits.
The average purchase cost of short-term investors exceeds 102,000 USD, raising expectations for Bitcoin's price to continue rising.
Bitcoin's price could still increase by about 20%-25% before entering the profit-taking phase.
What is the MVRV index and what does it reflect about the current Bitcoin market?
According to analyst Darkfost, the MVRV index is used to measure the unrealized profit of Bitcoin holders, especially short-term investors (STH). With the current MVRV at 1.15, below the threshold of 1.35, the market has not yet seen much profit-taking pressure, indicating room for growth. This data was compiled and analyzed by experts on the CryptoQuant platform in July 2024.
An MVRV index below 1.35 indicates that Bitcoin holders do not yet have significant profits to prepare for selling, increasing the likelihood that prices will continue to rise.
Darkfost, CryptoQuant Analyst, July 17, 2024
The MVRV (Market Value to Realized Value) index measures the market price against the realized purchase price, helping to forecast the trend of price corrections or continuations of Bitcoin based on investor profit-taking behavior.
How does the average purchase cost of short-term Bitcoin holders affect price trends?
The average purchase cost (realized price) is the price that short-term investors have paid to acquire Bitcoin. As of July 11, 2024, this level surpassed 100,000 USD and currently stands above 102,000 USD, indicating that new investors are still accepting high prices, reinforcing the potential for price increases. Experts assess this as a positive signal for the market outlook in the short term.
The increase in average purchase price reflects strong buying demand and expectations for Bitcoin to sustain its upward momentum in the near future.
Darkfost, CryptoQuant Analyst, July 17, 2024
This trend analysis based on actual data shows that new investors are not overly concerned about fluctuations and are still willing to buy at higher prices, contributing to market stability.
How much more can Bitcoin increase before a correction occurs?
According to in-depth evaluations from CryptoQuant, Bitcoin's price has the potential to increase by approximately 20%-25% more before investors start taking profits, causing price corrections. Based on MVRV and average purchase cost indicators, the current cryptocurrency market remains in the 'green' zone regarding growth potential.
Current Value Index Profit-Taking Threshold Price Increase Forecast MVRV STH 1.15 1.35 Still room for price increase Average purchase cost 102,000 USD 100,000 USD (previous threshold) Price support trend Increase forecast – – 20%-25%
What factors influence profit-taking and price corrections in the Bitcoin market?
Profit-taking usually occurs when the MVRV index reaches around 1.35, equivalent to unrealized profits nearing 35%. At that point, short-term investors typically sell to lock in profits, leading to price corrections. This is a natural mechanism to maintain balance between supply and demand in the highly volatile cryptocurrency market.
Analyses by expert Darkfost also emphasize the role of average purchase cost – as this level increases, the risk of profit-taking also rises. However, the current MVRV level still supports the next price increase trend.
Why is monitoring MVRV and average purchase cost important for investors?
Monitoring MVRV and average purchase cost metrics helps investors capture important signals about the right timing to enter and exit trades, avoiding FOMO traps or being affected by short-term fluctuations. CryptoQuant's report provides reliable data to support effective investment decisions.
Experienced investors often combine these indicators with technical and fundamental analysis to predict trends and better manage risk in the cryptocurrency market.
Frequently Asked Questions
What is the MVRV index? The MVRV index measures unrealized profits between market price and the average purchase price of investors. This is a tool for guiding profit-taking trends in Bitcoin. Why is the average purchase cost important? The average purchase cost reflects market strength and investor sentiment, helping to predict the likelihood of price increases or corrections in the short term. How much longer can Bitcoin increase in price? Based on MVRV and purchase costs, Bitcoin could increase another 20%-25% before entering the profit-taking and correction phase. How to reduce risk when investing in Bitcoin? Investors should monitor indicators like MVRV and average purchase cost along with technical analysis to make informed decisions and avoid chasing short-term fluctuations. Where is the information about the MVRV index updated from? MVRV index and average purchase cost data are often analyzed by platforms specializing in on-chain data like CryptoQuant.
Source: https://tintucbitcoin.com/bitcoin-tang-20-25-theo-cryptoquant/
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